Bank sued over $500k deposit

HARARE - Tetrad Investment Bank (Tetrad) has been taken to court by the Bindura University of Science Education (BUSE) over a $560 000 deposit, which it has failed to pay on maturity.

This comes as the fledgling commercial bank has been hit by a serious liquidity crunch and is embroiled in a $700 000 dispute with controversial businessman Jayesh Shah, in a case that is still running in the courts.

As such, the bank has been given a March 26 ultimatum in Zimbabwe’s High Court to pay up the $555 983,33 deposit or face legal consequences.

“The date on which the payment was supposed to be made, November 8, 2013 has since lapsed,” the college’s lawyers Mtamangira and Associates said.

“The defendant (Tetrad) has refused, failed, neglected to pay the debt despite numerous demands being placed on the strength of the acknowledgement of debt,” the lawyers said, adding the money could be paid to the Bindura-based institution directly or through the deputy sheriff

According to the State’s case, BUSE entered into a 30-day investment deal with Tetrad in October 2013 and at which point the retail group committed to pay the $560 000 deposit — made up of a $550 000 principal amount and interest of $5 958,33, which was calculated at 13 percent.

While the upmarket institution has managed to cough up nearly $83 000, it has reportedly failed to honour its end of the bargain and contract since November last year.

Despite persistent pressure and demands by BUSE, Tetrad still owes a balance of $473 000.

Last year, the bank also hit the headlines after a serious row with another client Tapvice Enterprises (Private) Limited, although it is the one which was owed $1 million-plus.

In that incident, the bank’s executives were summoned to appear before the magistrates’ court on “theft of trust property charges” after withdrawing a total of $1 024 284, 88 from the latter’s account.

Meanwhile, the financial institution’s parent Tetrad Holdings Limited has recently unveiled a $15 million capital injection, although it is seeking some more cash for its upcoming unit.

The group, which has applied for a conversion of its merchant banking licence to a commercial one, is yet to fully unveil or roll-out out its retail services.

Christina Muchekeza, the bank’s head of marketing, recently told the Daily News that Tetrad had undertaken massive preparation for the launch of the project and commercial unit.

“…we are renovating buildings and opening new branches not only along Samora Machel, but also at Arundel Office Park, Mutare and Kwekwe,” she said, adding the group had also embarked on a serious information technology upgrade exercise aimed at positioning the bank with international standards.

“In the meantime, we are deploying intelligent teller machines (ITMs). This is a new core banking platform which incorporates mobile banking, Internet banking and a whole array of value-added services as well as few points of representation in preparation for this transition,” Muchekeza said

Apart from increasing its national footprint, the ITMs project offers clients advanced services or features such as deposit-taking and real time account credits.

Comments (5)

I just hope things will get to normal for Tetrad. It was one of those financial institutions which was showing to be very promising. I had put my trust on them and I still need to be convinced to change my opinion. They are good under normal economic conditions. They owe me as well but i trust they will meet their promise.

Nyorodo - 24 March 2014

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Pumps - 25 March 2014

@ Nyarodo. Take your money and run. Economic fundamentals for the banking industry point to a bleak outlook. "Fledgling" institutions like Tetrad are always the hit the hardest and earliest. Management deserves props for building a robust institution, which has survived this long. Unfortunately, you can not beat Macroeconomics. Take your money and run. I will repeat...Take your moolah and run. I ca bet you that the bank will struggle to pay you back.

Analyst - 25 March 2014

@Nyorodo. I concur with Analyst. Tetrad once approached me with the offer to invest but I declined. I would also advise you to shy away from putting your money in the smaller (indigenous) institutions. I am a black Zimbabwean but my fellow black bankers lack corporate governance. They don't have a clue about the separation between depositors' and personal funds. Chokwadi ndechekuti mari yakatodyiwa kuTetrad, sometimes kudya kwacho is in the form of imprudent investments. Take your money while you can and run!

Voice of reason and experience - 25 March 2014

It sad that we put so much trust in banking institutions when in fact some of them do little to deserve it. Myself and my fellow directors learnt the hard way when Tetrad stole our gold milling plant , in an under hand transaction that still leaves even the most hardened criminal minds baffled. I am applauded at these criminals hiding behind bank licences, and clearly the Reserve Bank needs to do something before more public assets are lost to these cowboys. Their method of growth is to steal your money/asset then engage in lengthily legal process where you will suffer from operational cash fatigue, meanwhile they will be applying your funds/ assets for their own avaricious gain. Then again what do you expect, Eugene Mlambo the CEO, left DCZ ablaze before it was purchased by Nigel Chanakira and Emmanuel Elijah Chikaka the COO presided over the failed Rapid Financial Holdings. Take your monies out.

1ariega - 25 March 2014

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